Motorcycle Rental Businesses in the Commercial District behind Train Station of Tainan City

Case:

Key Words:

rental motorcycle, motorcycle renting, false and untrue advertisement

Reference:

Fair Trade Commission Decision of December 5, 2012 (the 1100th Commissioners' Meeting), Dispositions Kung Ch'u Tzu No. 101176, 101177, 101178, and 101179

Industry:

Rental and Leasing of Other Transport Equipment (7729)

Relevant Laws:

Article 21 of the Fair Trade Law

Summary:

1. Tainan City Government forwarded a complaint from an individual to the FTC. The informer visited Tainan during the February 28 long weekend holiday in 2012. He wanted to rent a 100cc motorcycle, but the first rental motorcycle shop he went had rented out all its motorcycles. Therefore, he tried other rental motorcycle businesses but only found out that a 50cc motorcycle and would cost NT$500 a day and a 100cc for NT$700. As the prices were inconsistent with the ones posted on the Internet, he believed that the advertising was false and untrue. Meanwhile, during the investigation, the FTC found a rental motorcycle operator's shop sign claiming that "No. 1 in online Voting" which also involved in false and untrue advertising. The FTC therefore investigated both cases together.
2. Grounds for disposition:
   (1) According to Article 21 (1) of the Fair Trade Law, "No enterprise shall make or use false or misleading representations or symbols as to price, quantity, quality, content, production process, production date, valid period, method of use, purpose of use, place of origin, manufacturer, place of manufacturing, processor, or place of processing on goods or in advertisements, or in any other way making known to the public." It is also set forth in Paragraph 3 of the same article that "the two preceding paragraphs shall apply mutatis mutandis to enterprises providing services." The term "false and untrue" means the representation or symbol applied was inconsistent with the fact and the difference is difficult for the general public or concerned parties to accept and such a representation or symbol could lead to wrong perceptions or decisions. The term "misleading" means that, a representation or symbol, whether consistent with the fact, is likely to lead to wrong perceptions or decisions among the general public or concerned parties. Therefore, when enterprises make any false, untrue or misleading representations with regard to price or content of service through advertising or other measures, they are in violation of the abovementioned regulations. Meanwhile, if the representations or symbols made by enterprises regarding their products or services are concrete figures or superlatives, such as "the only," "the No. 1," "the champion," "the biggest," "the largest quantity," and so on, used as objective statements of fact, they are required to have objective statistics or results of opinion surveys to support their representations; otherwise, such advertisements will be regarded as false, untrue or misleading representations with respect to the quality of product or service in violation of the aforesaid regulations.
   (2) The price information presented on the websites, business cards or shops of rental motorcycle operators is direct or indirect conveyance of messages to the general public or concerned parties. It is exactly the "any other way making known to the public" referred to in Article 21 (1) of the Fair Trade Law. In addition, the objective of rental motorcycle businesses is to provide service to tourists and the price information presented on the websites, business cards or at the shops is important information according to which trading counterparts will make their transaction decisions. In other words, they can help attract trading counterparts. Therefore, when the price information presented is inconsistent with the actual prices, Article 21 of the Fair Trade Law is violated.
   (3) The FTC reviewed the rental contracts to understand the actual charges collected by Song Xing Rental Car Co., Ltd., Qian Feng Rental Motorcycle Shop, and Huang Jia Rental Motorcycle Shop in the commercial district behind Tainan Train Station during the February 28 long weekend holiday. The charges in many entries were inconsistent with the charging standards posted on the website of Song Xing Rental Car Co., Ltd., on the business card of Qian Feng Rental Motorcycle Shop, and on the price list at the counter of Huang Jia Rental Motorcycle Shop. Meanwhile, Zai Su Pei Home Advertising Enterprise Co. posted on the shop sign the claim that its rental motorcycle service was "No. 1 in online voting" but was unable to provide any objective statistics or data to support the claim. It was therefore a false, untrue and misleading representation capable of leading to wrong perceptions or decisions among the general public. The conduct was in violation of Paragraph 3 of Article 21 of the Fair Trade Law and Paragraph 1 of the same article was applicable mutatis mutandis. According to the first section of Paragraph 1 of Article 41 of the Fair Trade Law, the FTC ordered the said businesses to immediately cease their unlawful acts and imposed an administrative fine of NT$70,000 respectively.

Summarized by: Shen, Li-Wei; Supervised by: Liou, Chi-Jung